Tuesday, December 31, 2013

On September 19, 2013, the Executive Secretary of the Foreign-Trade Zones ("FTZ") Board docketed an application submitted by the Huntsville-Madison County Airport Authority, grantee of FTZ 83, requesting subzone status subject to the existing activation limit of FTZ 83 on behalf of VF Jeanswear in Hackleburg, Alabama. No authorization for production activity was been requested. Today the FTZ Board published in the Federal Register approval of the application. Note that as stated in the application, the subzone will be used for warehousing, labeling, and distribution, and, therefore, will result only in duty deferral, not duty avoidance.

The
World Intellectual Property Organization provides this definition:

Intellectual
property (IP) refers to creations of the mind, such as inventions; literary and
artistic works; designs; and symbols, names and images used in commerce.

While this
definition seems a little weak, it is suitable for our purposes.And to be fair, this is a tougher question
than it appears. At least two books have been written about intellectual
property that never actually define the term.Neither does the Agreement on Trade Related Aspects of Intellectual
Property (TRIPS), the IP portion of the GATT.

Patents:Patents provide inventors the exclusive right
to use the product or process they created for fixed periods of time.

Industrial
Design:An industrial design is a
reproducible visual characteristic of an article.They are inseparable from the articles to
which they are applied.In the US,
industrial design is protected by design patents with 14
years of protection.

Copyrights:Copyrights are rights given to literary and
artistic creators of original works for a fixed period of time.The granted right normally protects how an
idea is expressed or presented instead of the idea itself.Copyrights are usually used for IP with no
industrial applicability.The exception
is that most software is protected by copyright.

Trademarks
(and Service Marks):Are the exclusive
right to use a distinctive name, sign or mark to indicate that goods or
services are provided by a specific enterprise.Trade and service marks need to be registered and can be renewed
indefinitely.

Geographic
Indication:Similar to a trademark,
geographic indications are applied to goods or services that come from a
specific geographic region.

Trade
Secrets:Trade secrets are proprietary
information held in confidence by people or organizations. Unlike the above IP
protection tools, trade secrets are generally protected through contract and
liability laws.

Why Is Intellectual Property So Sensitive?

At its core,
the disagreement is about the relative benefits and costs of IP protection.

IP
rights exist because society benefits when creators publicly share their
creations. For example, the advances in medicine, communications and
electronics over the last 50 years have unarguably improved society. Supporters argue that these advances are
shared with society because of the IP rights that protect a creator’s ability to
profit from their creations.Unfortunately,
IP rights also make things more expensive by limiting access to the creation
for a period of time.Detractors argue
that the long term benefits of IP protection are not enough to justify these
additional costs.

When Do Intellectual Property Issues
Occur?

Whenever
something useful is expensive and difficult to create but once created is simple
and inexpensive to duplicate then you are going to have intellectual property
issues.

Who is Most Sensitive to Intellectual
Property?

Industries
most sensitive to IP rights include: Pharmaceuticals, Chemicals, Software,
Entertainment, and Electronics/IT.As
suggested above, each of these industries have products that reflect high
intellectual content relative to actual production costs.

Below is a
summary of selected patents that have been recently issued in textile related
classification codes:

Ballistic
Vest Carrier Cover System:A simple
fabric cover designed to be worn over a ballistic vest to give the wearer the
appearance of wearing a uniform (disguising the vest).Built into the garment is a support system
that transfers weight supported by the duty belt on the hips and waist to the
vest which is supported by the shoulders.Patent #: 8528112.Inventors:Blauer and Lee.Assignee:Blauer Manufacturing Company Inc.

Golf
Glove:A golf glove with lines that when
properly aligned indicate that the hands are correctly gripping the club.Patent #:8544116.Inventor:Lumpiesz.Not Assigned.

Cloth
Assembly for Making A Protective Pad for Sports:Pads made out of knitted materials that
breath, are elastic for comfort during movement and are secured by hook and
loop tape.Patent #:8544119.Inventor:Wu.Not assigned.

Sock:A sock knitted with “functional” areas to
prevent slippage between the foot and the sock when walking, especially without
shoes.Patent #:8544300.Inventor:Kaneda, et.al.Assignee: Okamoto
Corporation.

Zipper
Arrangement with a Foldable Pull:A
standard zipper modified to increase ease of use.Improvements to the coupling assembly and
pull assembly make the zipper easier to feel and use when wearing gloves or
otherwise impaired.Patent #:8528115.Inventors:Damon, et al.Assignee:Under Armour, Inc.

Woven Fabric with a Color Glittering
Effect:A fabric design (including
patterns) which highlights the colored yarns used in the construction.Several known pitfalls are avoided.Patent #: 8550124.Inventor:Tsai.Assignee:Chia Her Industrial Co. Ltd.

Jim Carson is
a principal of RB Consulting, Inc. and a registered patent agent.He has over 30 years of experience across
multiple industries including the biotechnology, textile, computer,
telecommunications, and energy sectors.RB Consulting, Inc. specializes in providing management, prototyping,
and regulatory services to small and start-up businesses.He can be reached via email at James.Carson.Jr@gmail.com or by
phone at (803) 792-2183.

When China joined the World Trade Organization ("WTO") at the end of 2001, the United States, and other WTO members were successful in obtaining, in the text of the accession agreement, a Transitional Product-Specific Safeguard Mechanism which provided that,

"In cases where products of Chinese origin are being imported into the territory of any WTO Member in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of like or directly competitive products, the WTO Member so affected may request consultations with China with a view to seeking a mutually satisfactory solution, including whether the affected WTO Member should pursue application of a measure under the Agreement on Safeguards...If consultations do not lead to an agreement between China and the WTO Member concerned within 60 days of the receipt of a request for consultations, the WTO Member affected shall be free, in respect of such products, to withdraw concessions or otherwise to limit imports only to the extent necessary to prevent or remedy such market disruption"

This Transitional Product-Specific Safeguard Mechanism, known as "421" from its section number in the Trade Act of 1974, has a "sunset" date of the end of 2013. Under 421 procedures the President may provide relief in the form of increased duties and/or other import restrictions with respect to the product being imported from the People's Republic of China. He may grant such relief to the extent and for the period that he considers necessary to prevent or remedy the market disruption.

In the dozen years of operation of the Section 421 provision, seven petitions for relief were filed. One was acted favorably on by the President. China did not want this provision in the accession agreement, and, while we'll never know precisely what the U.S. had to give up to get it, it is assuredly the case that the U.S. did have to give in on something else to get this safeguard that was so little used. Millions of dollars were spend on lawyers' fees for petitions that never delivered relief. Meanwhile, from the outcry on the editorial pages of pro-free trade publications one might have inferred that Section 421 represented a return to the prohibitive tariffs of the Smoot-Hawley era. When Section 421 sunsets on Tuesday, I believe the question to ask is, was it ever worth all the agitation on both sides?

HISTORY OF SECTION 421

TA-421-7 Pneumatic tires for cars and light trucks ITC found in the affirmative; on September 11, 2009, President Obama determined to provide import relief--

For the first year, the additional duty shall be in the amount of 35 percent;

for the second year, the additional duty shall be in the amount of 30 percent; and

in the third year, the additional duty shall be in the amount of 25 percent.

TA-421-6 Circular Welded Non-Alloy Steel Pipe From China ITC found in the affirmative; President Bush denied.

TA-421-5 Innersprings from China ITC did not find in the affirmative.

TA-421-4 Certain Ductile Iron Waterworks Fittings from China ITC found in the affirmative; President Bush denied.

TA-421-3 Brake Drums and Rotors ITC did not find in the affirmative.

TA-421-2 Wire Garment Hangers ITC found in the affirmative; President Bush denied.

TA-421-1 Pedestal Actuators ITC found in the affirmative; President Bush denied.

The Office of the U.S. Trade Representative, on December 24th, presented to Congress the 2013 annual report on China's compliance with its World Trade Organization obligations. With regard to textiles and apparel the report states --

Effective IPR enforcement has not been achieved, and IPR infringement remains a serious problem throughout China.

China remained unacceptably high in 2012. IPR infringement continued to affect products, brands and technologies from a wide range of industries, including films, music and sound recordings, publishing, business and entertainment software, pharmaceuticals, chemicals, information technology, apparel, athletic footwear, textile fabrics and floor coverings, consumer goods, food and beverages, electrical equipment, automotive parts and industrial products, among many others.

In 2014, the United States will continue to research and analyze the various forms of financial support that the Chinese government provides to manufacturers and exporters in China, including in the steel sector, the green technology sector and the textiles and apparel sectors, among other sectors, and assess whether this support is consistent with WTO rules.

On Thursday, December 26th, President Barack Obama signed the National Defense Authorization Act for Fiscal Year 2014 (H.R.3304). The massive bill (500 pages in length) funds the U.S. military and makes several changes to personnel and procurement policies. Of interest to many U.S. textile and apparel manufacturers is a policy change that mandates all branches of the services to use the same camouflage pattern.

The change had been pushed by William Enyart, Democrat from Illinois' 12th District, who says he started wondering about all those different patterns of camouflage in the service branches after reading a Washington Post story detailing how the military now has ten kinds of camouflage and spends millions on camouflage design. Enyart's proposal held bipartisan appeal given the duplication in the military at a time of austerity in government. A Government Accountability Office September 2012 report revealed that the military had spent $300 million in 2011 to purchase new camouflage and millions more for design. Over time, the study found, service branches have designed camouflage that distinguish one service from another. In a decade, the services introduced seven new camouflage uniforms with a variety of patterns and colors — two desert, two woodland and three universal patterns.

"Camo" is big business. Here's a listing of camouflage contracts let by the Department of Defense in 2013.

(a) ESTABLISHMENT OF POLICY.—It is the policy of the United States that the Secretary of Defense shall eliminate the development and fielding of Armed Force-specific combat and camouflage utility uniforms and families of uniforms in order to adopt and field a common combat and camouflage utility uniform or family of uniforms for specific combat environments to be used by all members of the Armed Forces.

(b) PROHIBITION.—Except as provided in subsection (c), after the date of the enactment of this Act, the Secretary of a military department may not adopt any new camouflage pattern design or uniform fabric for any combat or camouflage utility uniform or family of uniforms for use by an Armed Force, unless—

(1) the new design or fabric is a combat or camouflage utility uniform or family of uniforms that will be adopted by all Armed Forces;

(2) the Secretary adopts a uniform already in use by another Armed Force; or

(3) the Secretary of Defense grants an exception based on unique circumstances or operational requirements.

(c) EXCEPTIONS.—Nothing in subsection (b) shall be construed
as—

(1) prohibiting the development of combat and camouflage utility uniforms and families of uniforms for use by personnel assigned to or operating in support of the unified combatant command for special operations forces described in section 167 of title 10, United States Code;

(2) prohibiting engineering modifications to existing uniforms that improve the performance of combat and camouflage utility uniforms, including power harnessing or generating textiles, fire resistant fabrics, and anti-vector, anti-microbial, and anti-bacterial treatments;

(3) prohibiting the Secretary of a military department from fielding ancillary uniform items, including headwear, footwear, body armor, and any other such items as determined by the Secretary;

(4) prohibiting the Secretary of a military department from issuing vehicle crew uniforms;

(6) prohibiting the continued fielding or use of pre-existing service-specific or operation-specific combat uniforms as long as the uniforms continue to meet operational requirements.

(d) REGISTRATION REQUIRED.—The Secretary of a military department shall formally register with the Joint Clothing and Textiles Governance Board all uniforms in use by an Armed Force under the jurisdiction of the Secretary and all such uniforms planned for use by such an Armed Force.

(e) LIMITATION ON RESTRICTION.—The Secretary of a military department may not prevent the Secretary of another military department from authorizing the use of any combat or camouflage utility uniform or family of uniforms.

(f) GUIDANCE REQUIRED.—

(1) IN GENERAL.—Not later than 60 days after the date of the enactment of this Act, the Secretary of Defense shall issue guidance to implement this section.

(2) CONTENT.—At a minimum, the guidance required by paragraph (1) shall require the Secretary of each of the military departments—

(A) in cooperation with the commanders of the combatant commands, including the unified combatant command for special operations forces, to establish, by not later than 180 days after the date of the enactment of this Act, joint criteria for combat and camouflage utility uniforms and families of uniforms, which shall be included in all new requirements documents for such uniforms;

(B) to continually work together to assess and develop new technologies that could be incorporated into future combat and camouflage utility uniforms and families of uniforms to improve war fighter survivability;

(C) to ensure that new combat and camouflage utility uniforms and families of uniforms meet the geographic and operational requirements of the commanders of the combatant commands; and

(D) to ensure that all new combat and camouflage utility uniforms and families of uniforms achieve interoperability with all components of individual war fighter systems, including body armor, organizational clothing and individual equipment, and other individual protective systems.

Tuesday, December 24, 2013

Revision Military, Essex Junction, Vt., has been awarded a maximum $21,139,200 firm-fixed-price, definite-quantity contract for the procurement of advanced combat helmets. This contract is a competitive acquisition, and two offers were received. Location of performance is Vermont with an Apr. 15, 2015 performance completion date. Using military services are Army, Navy, Air Force, and Marine Corps. Type of appropriation is fiscal year 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa., (SPM1C1-14-C-0006).

This week we
have a great example:Patent # 8522366:Sock Structure and Method for Use.This patent was granted for a sock with a
pocket attached to it.

At
first glance, the objections seem clear.There is no reason to put a pocket on a sock.There is nothing new about pockets or
socks.There is no great secret about how
to put a pocket on a sock.

So how did
this sock get a patent?For that answer
we simply have to reverse the logic of the objections.

To get
a patent, an invention needs to meet three requirements: Utility, Novelty and
Not Obvious.Utility means that the
invention is useful.Novelty means that
it has not been done before.And
"Not Obvious" means just that.

Meeting
the Not Obvious requirement turns out to be pretty easy.The invention is a sock with a pocket
attached.It isn't a patent for a sock,
or a pocket, or even a process to attach the pocket to the sock.The patent is only for the sock and pocket
combination.In terms of the Not Obvious
requirement, if there is no reason to attach a pocket to a sock, then, almost by
definition, it is not obvious why you should attach a pocket to a sock.

The
argument for the Novelty requirement is even easier:if there is no reason to attach a pocket to a
sock then the odds are pretty good that nobody ever attached a pocket to a
sock.Therefore a sock with a pocket
attached would be novel.

This
leaves the Utility requirement.And it
turns out that chemotherapy provides a reason to attach a pocket to a
sock.About a third of the patients
receiving chemotherapy are affected by a condition called "Hand-Foot
Syndrome."The drugs used in chemo
sometimes leak directly into the body instead of the blood stream and the
body's reaction to this leakage is redness, pain, swelling and a sensation of
heat in the hands and feet of the patient.The most effective treatment for Hand-Foot Syndrome is to put cold packs
on the feet of the patient.

And our sock
is designed to hold that cold pack in place.

Below is a
summary of selected patents that have been recently issued in textile related
classification codes:

Sock
Structure and Method for Use:This is a
sock that has designed in it a pocket to hold cold packs next to the wearer’s
feet.The intended use is to reduce the
pain of “hand-foot syndrome” which is a side effect of chemotherapy
patients.Patent #:8522366.Inventor:Austin.No assignee.

Torso
Garment:A shirt intended for use in
paintball games.The shirt has multiple
“gripping areas” which are non-skid surfaces intended to hold the gunstock in
place and improve stability and shooting accuracy.Patent #:8510864.Inventor:Benini.No assignee.

Convertible
Clothing Article with Containment Pouch:A hooded garment. The hood is
designed with an internal lining that becomes a pouch capable of storing the
garment for convenient carrying or packing when not in use.Patent#: 8510865.Inventors:Pyfer and Ryan.No assignee.

Clothing
Systems:A dual use woman’s swimwear
system that converts a two piece into a single piece unit.System can be configured with multiple
midpieces to allow a pregnant woman to wear the suit as a one piece during
pregnancy and then continue to use the suit as a one piece or a two piece after
the child is born.Patent #:8522362.Inventor:Stones and Raymond.Assignee:Stones.

Garment
Pocket for Carrying an Object in a Concealed State:A two panel system that provides a way to
discretely carry a concealed items.The
space has a means to hold whatever is concealed securely in place.Patent #: 8522367.Inventors:French and French.Assignee:CCW Breakways, LLC.

Cervical Spine
Protection Apparatus and Methods of Use:Intended to be worn as football pads.The structure consists of a helmet and a combination of elastic bands
and more rigid bands and supports designed to allow normal motion while limiting
movement during an impact to a safe range of motion.Patent #: 8528113.Inventors:Siegler, et al.Assignee:Drexel University.

Full
Suspension Footwear:A suspension/spring
mechanism that stores the energy of the landing of a runner’s foot and returns
some portion of it on “toe off.” Patent #: 8528233.Inventor:Killion.Not Assigned.

Ventilated
Air Liner for a Helmet: A series of padded cells that provide protection and
for a tight fit.The cells are aligned
in the helmet to allow air flow through the helmet increasing the comfort of
the user.Patent #: 8544117.Inventors: Erb, et.al.Assignee:Kranos IP Corporation.

Shoe Charm Holder
Device:A way to attach a decorative
charm on a high heel shoe.Patent
#:8544196.Inventor:Leo.Not Assigned.

Running
Shoe:A plate spring incorporated into
the sole of a running shoe that recovers and returns impact energy of the shoe
landing to the runner.Patent #:8549773.Inventor:Nakatsuka.Not Assigned.

Protective
Gear:A scarf intended to be worn to
protect the head (for example from dust).The scarf has inner and outer panels to improve effectiveness and
methods to securely attach the scarf to the wearer.Patent #:8549662.Inventor:Chang.Assignee:Wrong Gear, Inc.

Jim Carson is
a principal of RB Consulting, Inc. and a registered patent agent.He has over 30 years of experience across
multiple industries including the biotechnology, textile, computer,
telecommunications, and energy sectors.RB Consulting, Inc. specializes in providing management, prototyping,
and regulatory services to small and start-up businesses.He can be reached via email at James.Carson.Jr@gmail.com or by
phone at (803) 792-2183.

Monday, December 23, 2013

Sergio Loro Piana, age 65, died December 20th in Milan, after a long illness. Until the recent sale of the company to LVMH, Sergio and his brother, Pier Luigi Loro Piana, were co-principals of the Loro Piana company. He is survived by his wife, Maria Luisa, and their three children, and his brother Pier Luigi.

I first heard that aphorism at a holiday party over a decade ago. It’s been around longer than that and I haven’t been able to determine who first said it and when.

On the face the saying makes sense. After all, what better movie for adults who still believe in Santa Claus than Miracle on 34th Street? Besides (watch out for plot spoiler) the picture’s crisis is resolved when a huge federal government agency—the Post Office—comes to the rescue. And with a divorced mother rearing a child alone, Miracle features a non-traditional family, surely a plus in the eyes of liberals.

It’s a Wonderful Life, on the other hand, celebrates the infinite worth of an individual human being, a worth that far exceeds even the biggest financial fortune. In Wonderful Life the hero’s crisis is resolved (another plot spoiler) by the spontaneous voluntary action of family, friends, and local community; emphatically not by the government. The film also shows people in fervent prayer, not to some generic higher power but to the God of the Bible as worshipped by the Protestant and Catholic believers shown in the picture. That alone must drive some liberals nuts when the film is broadcast over the public airwaves.

But the game can be played the other way. Wonderful Life presents negative stereotypes of bankers, so much so that when it was released some Hollywood observers (but not, as is erroneously asserted on some liberal websites, the Federal Bureau of Investigations) charged that it was a vehicle for communist propaganda. The charge is easy to ridicule today, but in the 1940s communist infiltration of the motion picture industry was a real and serious threat to American values. Now look at the favorable treatment—not to mention free advertising—that Miracle gives to two large department stores! Main Street Republicans surely must find that refreshing compared to the negative views of business that Hollywood gives us today.

The lesson? It’s just a movie! Enjoy them both, or whichever ones you choose to watch this holiday season. Santa’s list does not include your political affiliation, but he does have a lump of coal for those who would strip our public life of all sense of Wonder at the Love of God and thankfulness for all Miracles big and small.

Excel Garment Manufacturing Ltd., El Paso, Texas, has been awarded a maximum $7,125,286 firm-fixed-price contract for rip-stop airmen battle uniform coats and trousers for both men and women. This contract is a competitive acquisition and five offers were received. Location of performance is Texas with a Nov. 19, 2014 performance completion date. This is a one-year base contract with four one-year option periods. Using military service is Air Force. Type of appropriation is fiscal 2014 through fiscal 2015 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa., (SPM1C1-14-D-1006).

Friday, December 20, 2013

United States Customs and Border Protection has announced the East Coast Trade Symposium, which will be held in Washington, DC on Thursday, March 6 and Friday, March 7, 2014. The East Coast Trade Symposium will feature panel discussions involving agency personnel, members of the trade community and other government agencies, on the agency's role in international trade initiatives and programs.

ADDRESSES: The CBP 2014 East Coast Trade Symposium will be held at the Washington Hilton Hotel, at 1919 Connecticut Avenue NW., Washington, DC 20009, in the Columbia 5-12 room.

The theme for the 2014 East Coast Trade Symposium will be ``Increasing Economic Competitiveness Through Global Partnership and Innovation.'' The format of the East Coast Trade Symposium will be held with general sessions and breakout sessions. Discussions will be held regarding CBP's role in international trade initiatives and partnerships.

The agenda for the 2014 East Coast Trade Symposium and the keynote speakers will be announced at a later date on the CBP Web site (http://www.cbp.gov). Registration is now open. The registration fee is $128.00 per person. Interested parties are requested to register early, as space is limited. All registrations must be made online at the CBP Web site (http://www.cbp.gov/xp/cgov/trade/trade_outreach/2014_trade_symp/) and will be confirmed with payment by credit card only.

Federal Prison Industries, Washington, D.C., has been awarded a maximum $15,948,000 modification (P00012) exercising the second one-year option period on a one-year base contract (SPM1C1-12-D-F503) with two one-year option periods for extreme cold wet weather trousers. This is a firm-fixed-price contract. Locations of performance are District of Columbia and Kentucky with a Dec. 24, 2014 performance completion date. Using military service is Army. Type of appropriation is fiscal 2014 through fiscal 2015 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa.

Hazard: The buckles on the waist and shoulder straps can crack or break, posing a fall hazard to the child.

Units: About 305,000 and 36,000 in Canada

Description: The Playtex Hip Hammock is an infant carrier designed to strap the baby against the caregiver’s body at the hip. It is made of a soft, quilted fabric and intended for babies that are from 15 to 35 pounds. The child seat is attached with straps that wrap around the carrier’s hips and shoulder. “Playtex Hip Hammock” is printed on a label sewn into the front of the carrier. All model numbers are being recalled. Model numbers 05300, 05301, 05302, 05306, 05307 and 05308 are sewn into the inside panel below the instructions for use. They come in basic and deluxe styles. The hip hammock’s fabric is suede or ultra-suede in black or navy colors on the outside, and the inside lining is black, black and white check or burgundy.

Incidents/Injuries: Playtex has received 87 reports of the buckles cracking or breaking, including two reports of injuries, where one infant required emergency room treatment.

Remedy: Consumers should stop using the carrier and contact Playtex for instructions on how to return the product for a full refund.

Sold at Burlington Coat Factory, Target, Walmart, juvenile product, baby and discount stores nationwide and online at Amazon.com from June 2004 through December 2008 and January 2010 in Canada for about $40 for the basic model and $60 for the deluxe model.

Thursday, December 19, 2013

Brookwood Companies, Inc., a leading integrated textile company, announced, earlier this month, that the United States Court of Appeals for the Federal Circuit summarily affirmed the Southern District of New York's ruling that Brookwood did not infringe certain patents belonging to Nextec Applications, Inc.

At issue were two Nextec patents, 5,954,902 and 6,289,841, that Brookwood argues are invalid for a number of reasons, including the existence of a number of prior art references that Brookwood believes disclose and render obvious the "encapsulation" technology allegedly covered by the two Nextec patents. Since these prior art references were in existence prior to the filing date of the Nextec patents (some dating as far back as 1938), Brookwood believes that Nextec is not entitled to the two patents at issue.

Agathon Associates has been approached by the German textile and fashion federation on behalf of a German student looking for an internship at a U.S. company in the textile finishing sector. He is available from July 1, 2014 till June 30, 2015. He is financial independent, but he will we glad if he could earn some money for covering the living costs during the Internship in the U.S. If you are interested email David Trumbull at david@agathonassociates.com and he'll email you the students contact information.

On Wednesday, December 18, 2013, Stephen Lamar, Executive Vice President, American Apparel & Footwear Association ("AAFA"), at a stakeholders' event during the third round of the Trans-Atlantic Trade and Investment Partnership ("T-TIP") negotiations in Washington, D.C., delivered the following statement which Agathon Associates reproduces in full with the permission of AAFA --

On behalf of the American Apparel & Footwear Association (AAFA), thank you for providing an opportunity to share our perspectives on the Transatlantic Trade and Investment Partnership (TTIP).

By way of background, AAFA is the national trade association representing apparel, footwear, and other sewn products companies, and their suppliers, which compete in the global market. Our membership consists of about 530 American companies that represent one of the largest consumer segments in the United States. The apparel and footwear industry overall represents $350 billion in annual domestic sales and sustains more than four million American jobs. Our members are present throughout Europe, where they employ millions of Europeans and sell billions of dollars’ worth of clothes, shoes, and other fashion products.

AAFA strongly supports negotiation of a high standard comprehensive trade agreement with the European Union (EU) that actually reduces barriers to trade and investment between Europe and the United States. Europe is an important partner of the U.S. apparel and footwear industry. Not only is Europe a top market, but it is also a source of key fabrics and other inputs that are used in the production of apparel in the United States and around the world by top American brands. Strong US-EU synergies exist throughout the supply chains as designers, compliance experts, and logistics professionals from both continents routinely collaborate to bring today’s fashions into homes in the United States, Europe, and throughout the world. For U.S. apparel and footwear manufacturers, Europe represents both one of the largest, and the fastest growing market, for finished U.S.-made apparel and footwear. From 2009-2012, U.S. exports of finished apparel to Europe jumped 41.4 percent to $683 million. That phenomenal growth has continued into 2013, with U.S. apparel exports to Europe climbing 8 percent in the first 10 months of 2013. Yarn and fabric exports to Europe are also up. Likewise, U.S. footwear exports to Europe rose 15.9 percent from 2009-2012 to $54 million, and are up this year as well. On the import side, apparel and footwear imports from Europe equaled about $2 billion and $1.5 billion, respectively, for the year ending October 2013. Yarns and fabrics, used in garments manufactured in the United States, add in another $1.2 billion.

Eliminate all Trade Restrictions Taken Since January 1, 2013

Critical to the negotiation of the TTIP is the knowledge that neither country will undertake new or expand on any restrictive trade measures while the agreement is under consideration and negotiation. We remain deeply concerned the EU continues to maintain a punitive 26 percent tariff (on top of an existing 12 percent duty) on certain women’s jeans made in the United States and exported to Europe. We urge that these duties be eliminated immediately.

Immediate Reciprocal Elimination of Duties

We often hear that the T-TIP is not about duty reduction since the overall tariff rates between the EU and US are relatively low. While this may be true of duties collected in other industries, it is not the case of tariffs affecting our sector. In 2012, the United States collected more than $580 million worth of duties on imports of textiles, apparel, and footwear from Europe. This figure represents more than 12 percent of all duties collected on U.S. imports from Europe, even though textiles, apparel, and footwear represent less than 2 percent of all total U.S. imports from Europe. Duty reduction and elimination on the goods in our sector, on an immediate and reciprocal basis, would have a huge effect in reducing trade costs and barriers that disproportionately affect this industry, and which unnecessarily impose costs on consumers in both the United States and Europe.

Use Flexible Rules of Origin (ROO)

Duty elimination is meaningless if the rules of origin are so restrictive that they cannot be used. Restrictive rules of origin – such as the yarn forward rule of origin used in some of the free trade agreements the United States has negotiated – serve as “localization barriers to trade” by forcing companies to use certain inputs in order to gain the benefits of the agreement. Ultimately, such restrictive rules discourage use of the agreement by both importers and exporters. We urge that the ROO in the TTIP be simple and flexible to encourage the development of trade and investment of U.S. companies using global supply chains.

On a related point, the ROO should specifically envision cumulation among shared FTA partners so companies are not forced to abandon supply chains they have developed to take advantage of previous FTAs. We are concerned that development of US FTA partners in silos – where each agreement stands alone and supply chains that span agreements are discouraged – creates an unhealthy dynamic by setting up U.S. FTA partners as competitors and discouraging integration that can return value to U.S. firms, U.S. workers, and U.S. consumers, as well as all U.S. FTA partner countries.

Preserve the Berry Amendment in Government Procurement Chapter

The Berry Amendment, a staple of U.S. procurement law for more than 70 years, has ensured that all clothing and footwear purchased by the U.S. military is made in the United States. This law has supported the maintenance of a warm industrial base of domestic textile, footwear, and apparel firms that supply the U.S. military, including the ability to surge during security situations. The Berry Amendment has been enshrined in the government procurement chapter of all U.S. FTAs and in the multilateral Government Procurement Agreement (GPA). We strongly support continuation of this policy.

Harmonize Regulations on Labeling and Product Safety

We strongly support efforts to harmonize regulations and requirements on product safety and labeling. Last week, we submitted a joint letter with our counterpart organization in Europe, EURATEX, to do just that. Diverse and conflicting regulatory requirements are among the biggest costs our members face. Fortunately, there is a history of cooperation between U.S. and European negotiators (most recently in conjunction with the multilateral trade negotiations under the auspices of the Doha round) to harmonize labeling requirements. We believe there are ample opportunities in this area, as well as in product safety and chemical management, to develop common approaches for commonsense, fact-based regulations. We further believe harmonization opportunities exist among the EU nations and at subnational levels in the United States and Europe as well.

Include Facilitative Customs Provisions

We support the negotiation of a Customs chapter that emphasizes trade facilitation, treats trusted traders as partners, and focuses enforcement activities on traders who are more likely to present risks.

Negotiate A Global Value Chain Agreement

The TTIP presents a strong opportunity to negotiate an agreement with Global Value Chains (GVCs) in mind. We should craft an agreement that understands that American competitiveness, and the competitiveness of many U.S. industries, including the apparel and footwear industries, depends on access to global markets and global suppliers. Yet, despite these global links, the majority of the value of these products is earned and developed in the United States. A recent study of the U.S. apparel industry showed that 70 percent of the retail value of U.S. apparel imports is created in the United States. A similar study commissioned by the European Branded Clothing Alliance (EBCA) showed that 50 to 80 percent of the value of European apparel and footwear imports is created in Europe.

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In conclusion, we strongly support negotiation of the TTIP. We look forward to working with U.S. and EU negotiators and stakeholders to help craft an agreement that creates value for the U.S. apparel and footwear industries.

The American Apparel & Footwear Association ("AAFA") this week announced that it welcomed the introduction of the Generalized System of Preferences Update for Production Diversification and Trade Enhancement ("UPDATE") Act, legislation that would make U.S. imports of travel goods like luggage, backpacks and handbags, among other items, eligible for duty-benefits under the Generalized System of Preferences ("GSP") program. According to the AAFA announcement the GSP UPDATE Act introduced this week in the U.S. Senate by Senators Mark Begich (Dem., Arkansas) and Roy Blunt (Rep., Missouri) is a companion to a bill introduced in the U.S. House of Representatives on May 22, 2013.

The American Apparel and Footwear Association ("AAFA"), representing major American apparel and footwear brands, and the European Apparel and Textile Confederation ("EURATEX"), representing the European textile and fashion industries, have issued a joint statement regarding the Transatlantic Trade and Investment Partnership ("T-TIP") free trade agreement currently being negotiated between the United States and the European Union. The statement is available on the AAFA website - CLICK HERE

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